BMW looks round for site

Unions object at hint that engine production could shift from Munich to Britain

BMW could shift manufacture of its V6, V8 and V12 car engines from Munich to Britain, involving a £273m investment, it was suggested this week.

Although BMW said ‘we are not planning to change our engine strategy,’ it is known to be investigating theoretical options.

The 10 locations being considered are said to include Austria, Brazil, and Hungary as well as Britain. BMW’s move has been prompted by a cost-cutting drive in Germany. Unions at BMW’s Munich site are already fighting the move.

BMW has a deal to supply V8 and V12 engines to Rolls-Royce Motors for its four-door Rolls-Royce and Bentley saloons expected to be introduced next year. These engines will be made in Munich, BMW said.

Rolls-Royce Motors is now up for sale by its owner, Vickers. BMW is the candidate tipped by City analysts.

A Vickers spokeswoman said ‘it would be a huge boost to the UK’ if engine production was moved to Britain, but ‘we’ve not heard anything from BMW direct’.

Sir Colin Chandler, Vickers chairman, spoke to Bernd Pischetsrieder, BMW chairman, last week, but Vickers said the subject was not raised.

BMW could block a rival bid for Rolls-Royce by withdrawing its engines from the new models, a tactic it used to block Mayflower’s recent stillborn bid for Vickers.

This week it also emerged that Formula One boss Bernie Ecclestone may be interested in buying Rolls-Royce. In September BMW said it would return to Formula One motor racing, supplying engines for the Williams team in 2000.

Facing MPs’ questions last week, industry minister John Battle said the Department of Trade and Industry would decide ‘at the appropriate time’ if a Rolls-Royce takeover by a German firm would be referred to European or British regulatory authorities.

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